Execution Version

ASSET PURCHASE AGREEMENT

This Asset Purchase Agreement (this “Agreement”), dated as of January 18, 2018, is entered into between Quality I/N Signs and Outdoor Advertising, LLC, an Alabama limited liability company (“Seller”) and Standard Outdoor Southeast I LLC, a Delaware limited liability company (“Buyer”).

RECITALS

WHEREAS, Seller wishes to sell and assign to Buyer, and Buyer wishes to purchase and assume from Seller, the rights and obligations of Seller to the Purchased Assets and the Assumed Liabilities (as defined herein), and which together compose the “Business,” subject to the terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE I

PURCHASE AND SALE

Section 1.01         Purchase and Sale of Assets. Subject to the terms and conditions set forth herein, Seller shall sell, assign, transfer, convey and deliver to Buyer, and Buyer shall purchase from Seller, all of Seller’s right, title and interest in the assets set forth on Section 1.01 of the disclosure schedules (“Disclosure Schedules”) attached hereto (the “Purchased Assets”), free and clear of any mortgage, pledge, lien, charge, security interest, claim or other encumbrance (“Encumbrance”) except for the Permitted Encumbrances (as defined below).

Section 1.02         Excluded Assets. Notwithstanding the foregoing, the Purchased Assets shall not include those assets of the Seller set forth on Section 1.02 of the Disclosure Schedules (the “Excluded Assets”).

Section 1.03         Assumption of Liabilities. Subject to the terms and conditions set forth herein, Buyer shall assume and agree to pay, perform and discharge the liabilities and obligations arising after the Closing (as defined herein) under the Purchased Assets, but only to the extent that such liabilities and obligations do not relate to any breach, default or violation by Seller on or prior to the Closing (collectively, the “Assumed Liabilities”). Other than the Assumed Liabilities, Buyer shall not assume any liabilities or obligations of Seller of any kind, whether known or unknown, contingent, matured or otherwise, whether currently existing or hereinafter created.

 

Section 1.04         Purchase Price. The aggregate purchase price for the Purchased Assets shall be Ten Million Five Hundred Thousand Dollars ($10,500,000) (the “Purchase Price”), plus the assumption of the Assumed Liabilities. The Buyer shall pay the Purchase Price to Seller at the Closing (as defined herein), as follows:

(a)            Four Million Dollars ($4,000,000) (the “Cash Payment”), plus or minus, as applicable, the prorated amount that Seller prepaid leases exceeds prepaid revenue in the amounts set forth on Section 1.04(a)(i) of the Disclosure Schedules, shall be payable in cash, by wire transfer of immediately available funds in accordance with the wire transfer instructions set forth in Section 1.04(a)(ii) of the Disclosure Schedules.

(b)           Six Million Five Hundred Thousand Dollars ($6,500,000) shall be payable in the form of a promissory note (the “Note”) issued by the Buyer in the name of Seller in the form set forth as Exhibit A hereto.

Section 1.05         Allocation of Purchase Price. Seller and Buyer agree to allocate the Purchase Price among the Purchased Assets for all purposes (including tax and financial accounting) in accordance with Section 1.05 of the Disclosure Schedules. Buyer and Seller shall file all tax returns (including amended returns and claims for refund) and information reports in a manner consistent with such allocation.

ARTICLE II

CLOSING

Section 2.01         Closing. The closing of the transactions contemplated by this Agreement (the “Closing”) shall take place on an electronic basis on a date to be specified by the parties which shall be no later than two Business Days after satisfaction (or waiver as provided herein) of the conditions set forth in Article VI (other than those conditions that by their nature will be satisfied at the Closing), unless another time, date and/or place is agreed to in writing by the parties. The date on which the Closing occurs is referred to in this Agreement as the “Closing Date.” The consummation of the transactions contemplated by this Agreement shall be deemed to occur at 12:01 a.m. on the Closing Date. For purposes of this Agreement, “Business Day” means a day other than a Saturday, Sunday or other day on which banks located in New York, New York are authorized or required by law to close.

 

Section 2.02         Closing Deliverables.

(a)            At the Closing, Seller shall deliver to Buyer the following:

(i)            an assignment and assumption agreement and bill of sale in the form of Exhibit B hereto (the “Assignment and Assumption Agreement and Bill of Sale”) and duly executed by Seller, effecting the assignment to and assumption by Buyer of the Purchased Assets and the Assumed Liabilities;

(ii)           an Assignment and Assumption of Leases in the form of Exhibit C hereto (the “Assignment and Assumption of Leases”) and duly executed by Seller;

(iii)          copies of all consents, approvals, waivers and authorizations referred to in Section 3.02 of the Disclosure Schedules;

(iv)          a certificate pursuant to Treasury Regulations Section 1.1445-2(b) that Seller is not a foreign person within the meaning of Section 1445 of the Internal Revenue Code duly executed by Seller;

(v)           a certificate of the Secretary or Assistant Secretary (or equivalent officer) of Seller certifying as to (A) the resolutions of the board of directors of Seller, duly adopted and in effect, which authorize the execution, delivery and performance of this Agreement and the transactions contemplated hereby, and (B) the names and signatures of the officers of Seller authorized to sign this Agreement and the documents to be delivered hereunder;

(vi)          such other customary instruments of transfer, assumption, filings or documents, in form and substance reasonably satisfactory to Buyer, as may be required to give effect to this Agreement; and

(vii)         payoff letters, in form and substance reasonably satisfactory to Buyer, evidencing the discharge or payment in full of any indebtedness of Seller outstanding as of the Closing Date, in each case duly executed by each holder of such indebtedness as reflected in such payoff letters, which payoff letters shall also provide for the termination and release of any Encumbrances related to such indebtedness.

(b)           At the Closing, Buyer shall deliver to Seller the following:

(i)            the Cash Payment;

(ii)           the Note;

(iii)          the Assignment and Assumption Agreement and Bill of Sale duly executed by Buyer;

(iv)          the Assignment and Assumption of Leases duly executed by Buyer; and

(v)           a certificate of the Secretary or Assistant Secretary (or equivalent officer) of Buyer certifying as to (A) the resolutions of the board of directors of Buyer, duly adopted and in effect, which authorize the execution, delivery and performance of this Agreement and the transactions contemplated hereby, and (B) the names and signatures of the officers of Buyer authorized to sign this Agreement and the documents to be delivered hereunder.

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF SELLER

Seller represents and warrants to Buyer that the statements contained in this Article III are true and correct as of the date hereof. For purposes of this Article III, “Seller’s knowledge,” “knowledge of Seller” and any similar phrases shall mean the actual or constructive knowledge of any director or officer of Seller, after due inquiry.

Section 3.01         Organization and Authority of Seller; Enforceability. Seller is a limited liability company duly organized, validly existing and in good standing under the laws of the state of Alabama. Seller has full limited liability company power and authority to enter into this Agreement and the documents to be delivered hereunder, to carry out its obligations hereunder and to consummate the transactions contemplated hereby. The execution, delivery and performance by Seller of this Agreement and the documents to be delivered hereunder and the consummation of the transactions contemplated hereby have been duly authorized by all requisite limited liability company action on the part of Seller. This Agreement and the documents to be delivered hereunder have been duly executed and delivered by Seller, and (assuming due authorization, execution and delivery by Buyer) this Agreement and the documents to be delivered hereunder constitute legal, valid and binding obligations of Seller, enforceable against Seller in accordance with their respective terms.

Section 3.02         No Conflicts; Consents. The execution, delivery and performance by Seller of this Agreement and the documents to be delivered hereunder, and the consummation of the transactions contemplated hereby, do not and will not: (a) violate or conflict with the certificate of formation, by-laws or other organizational documents of Seller; (b) violate or conflict with any judgment, order, decree, statute, law, ordinance, rule or regulation applicable to Seller or the Purchased Assets; (c) conflict with, or result in (with or without notice or lapse of time or both) any violation of, or default under, or give rise to a right of termination, acceleration or modification of any obligation or loss of any benefit under any contract or other instrument to which Seller is a party or to which any of the Purchased Assets are subject; or (d) result in the creation or imposition of any Encumbrance on the Purchased Assets. No consent, approval, waiver or authorization is required to be obtained by Seller from any person or entity (including any governmental authority) in connection with the execution, delivery and performance by Seller of this Agreement and the consummation of the transactions contemplated hereby.

 

Section 3.03         Title to Purchased Assets; Easements. Seller owns and has good title to the Purchased Assets, free and clear of Encumbrances, except for those Encumbrances those set forth on Section 3.03 of the Disclosure Schedules (the “Permitted Encumbrances”). The easements listed on Schedule 5.13 hereto include all easements relating to the Billboards.

Section 3.04         Assets; Condition of Assets. The Purchased Assets include, among other things, (i) the billboards set forth on Section 3.04 of the Disclosure Schedules (the “Billboards”); (ii) all ground leases for the real property upon which the Billboards are erected; (iii) all required permits and approvals relating to the construction and operation of the Billboards; and (iv) all equipment and personal property affixed or appurtenant to the Billboards; (v) all easements or rights of way relating to access to, visibility of or otherwise connected with the Billboards; (vi) all maintenance and advertising contracts relating to the Billboards (to the extent desired and assumed by Buyer); (vii) parts, supplies, accounts receivable, prepaid advertising, and all other assets used or useful in the operation of the Billboards, except cash and marketable securities; and (viii) any and all other rights or privileges connected with, arising from or necessary for the continued operation of the Billboards. The tangible Purchased Assets are in good condition and are adequate for the uses to which they are being put, and none of such Purchased Assets are in need of maintenance or repairs except for ordinary, routine maintenance and repairs that are not material in nature or cost.

Section 3.05         Assigned Contracts. Section 3.05 of the Disclosure Schedules includes each contract included in the Purchased Assets and being assigned to and assumed by Buyer (the “Assigned Contracts”). Each Assigned Contract is valid and binding on Seller in accordance with its terms and is in full force and effect. None of Seller or, to Seller’s knowledge, any other party thereto is in breach of or default under (or is alleged to be in breach of or default under), or has provided or received any notice of any intention to terminate, any Assigned Contract. No event or circumstance has occurred that, with or without notice or lapse of time or both, would constitute an event of default under any Assigned Contract or result in a termination thereof or would cause or permit the acceleration or other changes of any right or obligation or the loss of benefit thereunder. Complete and correct copies of each Assigned Contract have been made available to Buyer. There are no disputes pending or threatened under any Assigned Contract.

Section 3.06         Permits. Section 3.06 of the Disclosure Schedules lists all permits, licenses, franchises, approvals, authorizations, registrations, certificates, variances and similar rights obtained from governmental authorities included in the Purchased Assets (the “Transferred Permits”). The Transferred Permits are valid and in full force and effect. All fees and charges with respect to such Transferred Permits as of the date hereof have been paid in full. No event has occurred that, with or without notice or lapse of time or both, would reasonably be expected to result in the revocation, suspension, lapse or limitation of any Transferred Permit.

 

Section 3.07         Non-foreign Status. Seller is not a “foreign person” as that term is used in Treasury Regulations Section 1.1445-2.

Section 3.08         Compliance With Laws. Seller has complied, and is now complying, with all applicable federal, state and local laws and regulations applicable to ownership and use of the Purchased Assets.

Section 3.09         Legal Proceedings. There is no claim, action, suit, proceeding or governmental investigation (“Action”) of any nature pending or, to Seller’s knowledge, threatened against or by Seller (a) relating to or affecting the Purchased Assets or the Assumed Liabilities; or (b) that challenges or seeks to prevent, enjoin or otherwise delay the transactions contemplated by this Agreement. No event has occurred or circumstances exist that may give rise to, or serve as a basis for, any such Action.

Section 3.10         Brokers. Except for Williamson & Associates, no broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Seller.

Section 3.11         Financial Statements. Set forth in Section 3.11 of the Disclosure Schedules are the unaudited income statements of the Business for the years ended December 31, 2014, December 31, 2015, December 31, 2016 and December 31, 2017 (collectively, the Financial Statements, the “Financial Statements”). The Financial Statements have been prepared based on the books and records of the Business, and fairly present in all material respects the financial condition of the Business as of the respective dates they were prepared and the results of the operations of the Business, for the periods indicated, subject to (i) the absence of footnote disclosures and other presentation items and (ii) changes resulting from normal year-end adjustments.

Section 3.12         Full Disclosure. No representation or warranty by Seller in this Agreement and no statement contained in the Disclosure Schedules to this Agreement or any certificate or other document furnished or to be furnished to Buyer pursuant to this Agreement contains any untrue statement of a material fact, or omits to state a material fact necessary to make the statements contained therein, in light of the circumstances in which they are made, not misleading.

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer represents and warrants to Seller that the statements contained in this Article IV are true and correct as of the date hereof. For purposes of this Article IV, “Buyer’s knowledge,” “knowledge of Buyer” and any similar phrases shall mean the actual or constructive knowledge of any director or officer of Buyer, after due inquiry.

Section 4.01         Organization and Authority of Buyer; Enforceability. Buyer is a limited liability company duly organized, validly existing and in good standing under the laws of the state of Delaware. Buyer has full corporate power and authority to enter into this Agreement and the documents to be delivered hereunder, to carry out its obligations hereunder and to consummate the transactions contemplated hereby. The execution, delivery and performance by Buyer of this Agreement and the documents to be delivered hereunder and the consummation of the transactions contemplated hereby have been duly authorized by all requisite corporate action on the part of Buyer. This Agreement and the documents to be delivered hereunder have been duly executed and delivered by Buyer, and (assuming due authorization, execution and delivery by Seller) this Agreement and the documents to be delivered hereunder constitute legal, valid and binding obligations of Buyer enforceable against Buyer in accordance with their respective terms.

Section 4.02         No Conflicts; Consents. The execution, delivery and performance by Buyer of this Agreement and the documents to be delivered hereunder, and the consummation of the transactions contemplated hereby, do not and will not: (a) violate or conflict with the certificate of incorporation, by-laws or other organizational documents of Buyer; or (b) violate or conflict with any judgment, order, decree, statute, law, ordinance, rule or regulation applicable to Buyer. No consent, approval, waiver or authorization is required to be obtained by Buyer from any person or entity (including any governmental authority) in connection with the execution, delivery and performance by Buyer of this Agreement and the consummation of the transactions contemplated hereby.

Section 4.03         Legal Proceedings. There is no Action of any nature pending or, to Buyer’s knowledge, threatened against or by Buyer that challenges or seeks to prevent, enjoin or otherwise delay the transactions contemplated by this Agreement. No event has occurred or circumstances exist that may give rise to, or serve as a basis for, any such Action.

Section 4.04         Brokers. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Buyer.

 

ARTICLE V

COVENANTS

Section 5.01         Conduct of Business. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Closing Date, except with the prior written consent of Buyer, Seller shall:

(a)           (i) maintain its limited liability company existence and (ii) carry on the Business in the usual, regular and ordinary course in a manner consistent with past practice and in accordance with the provisions of this Agreement;

(b)           maintain the Billboards and other assets, properties and rights included in the Purchased Assets in the same state of repair, order and conditions as they are on the date hereof, reasonable wear and tear excepted; and

(c)           (i) confer with Buyer prior to implementing operational decisions of a material nature, (ii) report on a regular basis concerning the status of its business of operating the Billboards (the “Business”), and (iii) promptly notify Buyer of any event or occurrence not in the ordinary course of the Business.

Section 5.02         Negative Covenants. Except as expressly provided in this Agreement, Seller shall not do any of the following, in each case with respect to the Business, without the prior written consent of Buyer:

(a)            adopt or propose any amendment to the charter documents of Seller that could be expected to delay the consummation of the transactions contemplated by this Agreement;

(b)           sell, lease, transfer or assign any of the Purchased Assets;

(c)            assume, incur or guarantee any indebtedness or modify the terms of any existing indebtedness;

(d)           mortgage, pledge or subject to liens any assets, properties or rights related to the Business;

(e)           amend, modify, cancel or waive any rights under any of the Assigned Contracts;

(f)            take any action or engage in any transaction that is material to, or outside the ordinary course of, the Business;

(g)           be party to any merger, acquisition, consolidation, recapitalization, liquidation, dissolution or similar transaction involving the  Business; or

(h)           agree, whether in writing or otherwise, to do any of the foregoing.

 

Section 5.03         Access to Information; Investigation. Seller shall afford to Buyer’s officers, directors, employees, accountants, counsel, consultants, advisors and agents (“Representatives”) free and full access to and the right to inspect, during normal business hours, all of the Purchased Assets, and shall permit them to consult with the officers, employees, accountants, counsel and agents of Seller for the purpose of making such investigation of the Purchased Assets or Business as Buyer shall desire to make. Seller shall furnish to Buyer all such documents and copies of documents and records and information with respect to the Purchased Assets or Business and copies of any working papers relating thereto as Buyer may reasonably request.

Section 5.04         Release of Liens. Prior to the Closing Date, Seller shall cause to be released all Encumbrances, except for the Permitted Encumbrances set forth in Section 3.03 of the Disclosure Schedules, in and upon any of the Purchased Assets.

Section 5.05         Notification of Certain Matters. Seller shall give prompt notice to Buyer of (a) any fact, event or circumstance known to it that individually or taken together with all other facts, events and circumstances known to it, has had or could have, individually or in the aggregate, a material adverse effect on the Purchased Assets or the condition (financial or otherwise), operations, prospects or results of operations of the Business, or would cause or constitute a breach of any of its representations, warranties, covenants or agreements contained herein, (b) the failure of any condition precedent to Buyer’s obligations hereunder, (c) any notice or other communication from any third party alleging that the consent of such third party is or may be required in connection with the consummation of the transactions contemplated by this Agreement, or (d) any notice or other communication from any governmental authority in connection with the consummation of the transactions contemplated by this Agreement.

Section 5.06         Assistance with Buyer Financial Statements. Following the date hereof, if requested by Buyer, Seller shall provide reasonable assistance to Buyer in providing information regarding Seller and the Business that Buyer requires in order to prepare financial statements of Buyer required for filing by Buyer with the Securities and Exchange Commission in connection with Buyer’s obligations as a company registered pursuant to the Securities Exchange Act of 1934, as amended.

Section 5.07         Intentionally Omitted.

 

Section 5.08         Bulk Sales Laws. The parties hereby waive compliance with the provisions of any bulk sales, bulk transfer or similar laws of any jurisdiction that may otherwise be applicable with respect to the sale of any or all of the Purchased Assets to Buyer.

 

Section 5.09         Transfer Taxes. All transfer, documentary, sales, use, stamp, registration, value added and other such taxes and fees (including any penalties and interest) incurred in connection with this Agreement and the documents to be delivered hereunder shall be borne and paid by Seller when due. Seller shall, at its own expense, timely file any tax return or other document with respect to such taxes or fees (and Buyer shall cooperate with respect thereto as necessary).

Section 5.10         Further Assurances. Following the Closing, each of the parties hereto shall execute and deliver such additional documents, instruments, conveyances and assurances and take such further actions as may be reasonably required to carry out the provisions hereof and give effect to the transactions contemplated by this Agreement and the documents to be delivered hereunder, which shall include, but not be limited to, the reasonable cooperation of each of the parties to complete the transfer of all utility accounts, permit filings and any other account transfers.

Section 5.11         Post-Closing Covenant Regarding Termination of Leases. If, during the five (5) years following the Closing Date, the landlord or sublandlord under the lease or sublease for any Billboard included in the Purchased Assets terminates such lease prior to the end of the specified term or applicable renewal period of such lease, then Seller shall have the right, at its own expense, to contest the termination of such lease by the landlord or sublandlord in the appropriate court. If either: (i) Seller does not contest the termination; or (ii) the litigation regarding the termination, including any and all available appeals, results in the termination of such lease being upheld, then Seller shall compensate Buyer for such termination as follows:

(a)           Seller may offer to Buyer, as substitution for any Billboard as to which the lease has been terminated (the “Terminated Billboard”), another Billboard (the “Offered Billboard”), which offer Buyer may accept or reject in its sole discretion. Should Buyer accept the Offered Billboard, such acceptance shall constitute Buyer’s sole relief with respect to the Terminated Billboard.

(b)           If (i) Seller does not provide a substitute Billboard under Section 5.11(a), or (ii) if Buyer does not accept the Offered Billboard under clause (a), then Seller shall pay to Buyer, with such payment to made by set-off against the next installment then due from Buyer under the Note, an amount equal to the amount set forth with respect to the Terminated Billboard on Schedule 5.11(b) hereto; provided, that, the “value of location” amounts for each Terminated Billboard shall be reduced on a dollar for dollar basis by the gross advertising revenue actually received by Buyer for such Terminated Billboard following the Closing Date.

Notwithstanding the foregoing, the Seller and Buyer agree that if, during the five (5) years following the Closing Date, the termination of any lease by the landlord or sublandlord prior to the end of the specified term or applicable renewal period of such lease results from the conduct of the Buyer with respect to such lease or the related Billboard following the Closing Date, which conduct is materially different from Seller’s conduct with respect to such lease or related Billboard prior to the Closing Date, Seller’s obligations under this Section 5.11 shall not be triggered.

 

Section 5.12         Non-Interference.  For five (5) years following the Closing Date:

(a)           Seller shall not, and shall cause its affiliates not to, directly or indirectly, in any capacity, (i) solicit, engage in business with, or entice, or attempt to solicit or entice, any landlord of any billboard lease acquired by Buyer from Seller or (ii) solicit, entice, influence, or attempt to solicit, entice or influence, any such landlord to divert business away from Buyer or its affiliates or otherwise interfere with, disrupt or attempt to disrupt the business relationships, contractual or otherwise, between Buyer or its affiliates and any such landlord; and

(b)           Buyer and Seller agree that the parties may not have an adequate remedy at law and may be irreparably harmed in the event that any of the provisions of this Section 5.12 were not specifically performed. Accordingly, the non-breaching party may be entitled to injunctive relief to prevent breaches of this Section 5.12 and to specifically enforce the terms and provisions hereof, in addition to any other remedy to which it may be entitled, at law or in equity, including money damages in an amount not to exceed the amount paid by Buyer to Seller under the terms of this Agreement, without the posting of any bond.

Section 5.13         Right of First Refusal. During the period beginning on the Closing Date and ending on the tenth (10th) anniversary thereof (the “ROFR Period”), neither Seller nor any of its affiliates shall, directly or indirectly, enter into an agreement or consummate any transaction relating to the easements listed on Schedule 5.13 hereto with any person or entity other than Buyer or an affiliate thereof (a “Third-party Transaction”) except in compliance with the terms and conditions of this Section 5.13.

(a)            If, at any time during the ROFR Period, Seller receives a bona fide offer for a Third-party Transaction that Seller desires to accept (each, a “Third-party Offer”), Seller shall, within five (5) days following receipt of the Third-party Offer, notify Buyer in writing (the “Offer Notice”) of the material financial and other terms and conditions of such Third-party Offer (the “Material Terms”) and the identity of all proposed parties to such Third-party Transaction. Each Offer Notice constitutes an offer made by Seller to enter into an agreement with Buyer on the same Material Terms of such Third-party Offer (the “ROFR Offer”).

(b)           At any time prior to the expiration of the thirty (30) day period following Buyer’s receipt of the Offer Notice (the “Exercise Period”), Buyer may accept the ROFR Offer by delivery to Seller of a written notice of acceptance containing the Material Terms and any standard and customary conditions applicable to a transaction of this nature, executed by Buyer; provided, however, that Buyer shall not be required to accept any non-financial terms or conditions contained in any Material Terms that cannot be fulfilled by Buyer as readily as by any other person or entity (e.g., an agreement conditioned upon the services of a particular individual).

 

(c)            If, by the expiration of the Exercise Period, Buyer has not accepted the ROFR Offer, and provided that Seller has complied with all of the provisions of this Section 5.13, at any time during the sixty (60) day period following the expiration of the Exercise Period, Seller may consummate the Third-party Transaction with the counterparty identified in the applicable Offer Notice, on Material Terms that are the same or more favorable to Seller as the Material Terms set forth in the Offer Notice. If such Third-party Transaction is not consummated within such sixty (60) day period, the terms and conditions of this Section 5.13 will again apply and Seller shall not enter into any Third-party Transaction during the ROFR Period without affording Buyer the right of first refusal on the terms and conditions of this Section 5.13.

(d)           For the avoidance of doubt, the terms and conditions of this Section 5.13 apply to each Third-party Offer received by Seller, only with respect to the easements listed on Schedule 5.13, during the ROFR Period.

Section 5.14         Development Agreement. During the period beginning on the Closing Date and ending on the tenth (10th) anniversary thereof, Seller, either directly or through Mitchell Hembree, as an affiliate of Seller (either, for purposes of this Section 5.14, the “Developer”), may from time to time procure, permit and construct new sites for billboards (a “New Site”) in the market area in which the Business operated as of Closing. Prior to offering a New Site to an unrelated potential third party purchaser, Seller or Mr. Hembree shall present to Buyer or an affiliate thereof (either, for purposes of this Section 5.14, the “Acquiror”) the opportunity to acquire any such New Site, and Acquiror shall have the right, but not the obligation, to acquire such New Site for a purchase price to be agreed by Developer and Acquiror.

ARTICLE VI

CONDITIONS TO CLOSING

Section 6.01       Conditions to Obligations of Buyer and Seller. The obligations of Buyer and Seller to consummate the transactions contemplated by this Agreement are subject to the satisfaction on or prior to the Closing Date of the following conditions:

(a) No temporary restraining order, preliminary or permanent injunction or other order preventing the consummation of the transactions contemplated by this Agreement shall be in effect. No law shall have been enacted or shall be deemed applicable to the transactions contemplated by this Agreement which makes the consummation of such transactions illegal.

 

Section 6.02         Conditions to Obligation of Buyer. The obligation of Buyer to consummate the transactions contemplated by this Agreement is subject to the satisfaction (or waiver by Buyer in its sole discretion) of the following further conditions:

(a)            The representations and warranties of Seller set forth in this Agreement shall have been true and correct in all material respects at and as of the date hereof and shall be true and correct in all material respects at and as of the Closing Date as if made at and as of the Closing Date, except to the extent that such representations and warranties refer specifically to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects as of such earlier date.

(b)           Seller shall have performed or complied in all material respects with all obligations and covenants required by this Agreement to be performed or complied with by Seller at or prior to the Closing.

(c)            Buyer shall have received a certificate dated the Closing Date signed on behalf of Seller by an authorized officer thereof to the effect that the conditions set forth in Sections 6.02(a) and 6.02(b) have been satisfied (the “Seller Closing Certificate”).

(d)           There shall have been no material adverse change in the Purchased Assets or the condition (financial or otherwise), operations, prospects or results of operations of the Business.

(e)            No action or order shall be pending or threatened before any court or other governmental authority or before any other person or entity wherein an unfavorable order would (i) prevent consummation of any of the transactions contemplated by this Agreement, (ii) affect adversely the right of Buyer to own the Purchased Assets or (iii) restrain or prohibit Buyer’s ownership or operation of all or any material portion of the Business or Purchased Assets. No such action or order shall be in effect.

(f)            Any consents of third parties required in order for Buyer to consummate the transactions contemplated by this Agreement shall have been received.

(g)           No law shall have been enacted or shall be deemed applicable to the transactions contemplated by this Agreement which has any of the effects set forth in

Section 6.02(e).

(h)           Seller shall have delivered to Buyer all agreements and other documents required to be delivered by Seller to Buyer pursuant to Section 3.02(a) of this Agreement.

(i)             Buyer shall have received evidence in form and substance satisfactory to Buyer that all liens with respect to the Purchased Assets have been released.

Section 6.03         Conditions to Obligation of Seller. The obligation of Seller to consummate the transactions contemplated by this Agreement is subject to the satisfaction (or waiver by Seller in its sole discretion) of the following further conditions:

 

(a)            The representations and warranties of Buyer set forth in this Agreement shall have been true and correct in all material respects at and as of the date hereof and shall be true and correct in all material respects at and as of the Closing Date as if made at and as of the Closing Date, except to the extent that such representations and warranties refer specifically to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects as of such earlier date.

(b)           Buyer shall have performed or complied in all material respects with all obligations and covenants required by this Agreement to be performed or complied with by Buyer at or prior to the Closing.

(c)            Seller shall have received a certificate dated the Closing Date signed on behalf of Buyer by an authorized to the effect that the conditions set forth in Section 6.03(a) and 6.03(b) have been satisfied (the “Buyer Closing Certificate”).

(d)           No Action shall be pending or threatened before any court or other governmental authority or other person wherein an unfavorable order would (i) prevent consummation of any of the transactions contemplated by this Agreement or (ii) cause any of the transactions contemplated by this Agreement to be rescinded following consummation. No such order shall be in effect.

(e)            Buyer shall have delivered to Seller all agreements and other documents required to be delivered by Buyer to Seller pursuant to Section 3.02(b) of this Agreement.

ARTICLE VII

TERMINATION

Section 7.01         Termination.

(a)            This Agreement may be terminated at any time prior to the Closing:

(i)            by mutual written consent of Buyer and Seller;

(ii)           by Buyer or Seller if the Closing does not occur on or before January 31, 2018; provided that the right to terminate this Agreement under this clause (ii) shall not be available to any party whose breach of a representation, warranty, covenant or agreement under this Agreement has been the cause of or resulted in the failure of the Closing to occur on or before such date; or

(iii)          by Buyer if:

(A)          any condition to the obligations of Buyer hereunder becomes incapable of fulfillment other than as a result of a breach by Buyer of any covenant or agreement contained in this Agreement, and such condition is not waived by Buyer; or

 

(B)           there has been a breach by Seller of any representation, warranty, covenant or agreement contained in this Agreement or the Seller Disclosure Schedule, or if any representation or warranty of Seller shall have become untrue, in either case such that the conditions set forth in Sections 6.02(a) or 6.02(b) would not be satisfied; or

(iv)          by Seller if:

(A)          any condition to the obligations of Seller hereunder becomes incapable of fulfillment other than as a result of a breach by Seller of any covenant or agreement contained in this Agreement, and such condition is not waived by Seller; or

(B)           there has been a breach by Buyer of any representation, warranty, covenant or agreement contained in this Agreement or the Buyer Disclosure Schedule, or if any representation or warranty of Buyer shall have become untrue, in either case such that the conditions set forth in Sections 6.03(a) or 6.03(b) would not be satisfied.

(b)           The party desiring to terminate this Agreement pursuant to clause (ii), (iii) or (iv) shall give written notice of such termination to the other party hereto.

Section 7.02         Effect of Termination. In the event of termination of this Agreement as provided in Section 7.01, this Agreement shall immediately become null and void and there shall be no Liability or obligation on the part of Seller or Buyer or their respective officers, directors, stockholders or affiliates.

ARTICLE VIII

INDEMNIFICATION

Section 8.01         Survival. All representations, warranties, covenants and agreements contained herein and all related rights to indemnification shall survive the Closing for a period of twenty-four (24) months.

Section 8.02         Indemnification By Seller. Subject to the other terms and conditions of this Article VI, Seller shall defend, indemnify and hold harmless Buyer, its affiliates and their respective stockholders, directors, officers and employees from and against all claims, judgments, damages, liabilities, settlements, losses, costs and expenses, including attorneys’ fees and disbursements (collectively, “Losses”), arising from or relating to:

(a)            any inaccuracy in or breach of any of the representations or warranties of Seller contained in this Agreement or any document to be delivered hereunder;

 

(b)           any breach or non-fulfillment of any covenant, agreement or obligation to be performed by Seller pursuant to this Agreement or any document to be delivered hereunder;

(c)            any Excluded Asset or Excluded Liability.

 

Section 8.03         Indemnification By Buyer. Subject to the other terms and conditions of this Article VI, Buyer shall defend, indemnify and hold harmless Seller, its affiliates and their respective stockholders, directors, officers and employees from and against all Losses arising from or relating to:

(a)           any inaccuracy in or breach of any of the representations or warranties of Buyer contained in this Agreement or any document to be delivered hereunder;

(b)           any breach or non-fulfillment of any covenant, agreement or obligation to be performed by Buyer pursuant to this Agreement or any document to be delivered hereunder; or

(c)            any Assumed Liability, but only with respect to such Losses arising after the Closing.

 

Section 8.04         Indemnification Procedures. Whenever any claim shall arise for indemnification hereunder, the party entitled to indemnification (the “Indemnified Party”) shall promptly provide written notice of such claim to the other party (the “Indemnifying Party”). In connection with any claim giving rise to indemnity hereunder resulting from or arising out of any Action by a person or entity who is not a party to this Agreement, the Indemnifying Party, at its sole cost and expense and upon written notice to the Indemnified Party, may assume the defense of any such Action with counsel reasonably satisfactory to the Indemnified Party. The Indemnified Party shall be entitled to participate in the defense of any such Action, with its counsel and at its own cost and expense. If the Indemnifying Party does not assume the defense of any such Action, the Indemnified Party may, but shall not be obligated to, defend against such Action in such manner as it may deem appropriate, including, but not limited to, settling such Action, after giving notice of it to the Indemnifying Party, on such terms as the Indemnified Party may deem appropriate and no action taken by the Indemnified Party in accordance with such defense and settlement shall relieve the Indemnifying Party of its indemnification obligations herein provided with respect to any damages resulting therefrom. The Indemnifying Party shall not settle any Action without the Indemnified Party’s prior written consent (which consent shall not be unreasonably withheld or delayed).

Section 8.05         Right of Set-Off. Buyer shall have the right to set off any Losses incurred prior to the payment of the first installment under the Note against such first installment.

 

Section 8.06         Tax Treatment of Indemnification Payments. All indemnification payments made by Seller under this Agreement shall be treated by the parties as an adjustment to the Purchase Price for tax purposes, unless otherwise required by law.

Section 8.07         Effect of Investigation. Buyer’s right to indemnification or other remedy based on the representations, warranties, covenants and agreements of Seller contained herein will not be affected by any investigation conducted by Buyer with respect to, or any knowledge acquired by Buyer at any time, with respect to the accuracy or inaccuracy of or compliance with, any such representation, warranty, covenant or agreement.

Section 8.08         Cumulative Remedies. The rights and remedies provided in this Article VI are cumulative and are in addition to and not in substitution for any other rights and remedies available at law or in equity or otherwise.

ARTICLE IX

MISCELLANEOUS

Section 9.01         Expenses. All costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such costs and expenses.

Section 9.02         Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next business day if sent after normal business hours of the recipient; or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 9.02):

If to Seller:           Quality I/N Signs and Outdoor Advertising, LLC

225 County Road 1291

Cullman, AL 35058

Facsimile:

E-mail:

Attention:

 

with a copy to:     Webb, Klase & Lemond, LLC

1900 The Exchange, SE

Suite 480

Atlanta, Georgia 30339

Facsimile: (770) 217-9950

E-mail: flemond@webbllc.com

Attention:  G. Franklin Lemond, Jr., Esq.

If to Buyer:           Standard Outdoor Southeast I LLC

1521 Concord Pike, Suite 301

Wilmington, DE 19803

Facsimile: (302) 504-4780

E-mail: ianestus@spdopps.com

Attention: Ian Estus

with a copy to:     Morgan, Lewis & Bockius LLP

1701 Market Street

Philadelphia, PA 19103

Facsimile: (215) 963-5001

E-mail: justin.chairman@morganlewis.com

Attention: Justin W. Chairman, Esq.

Section 9.03         Headings. The headings in this Agreement are for reference only and shall not affect the interpretation of this Agreement.

Section 9.04         Severability. If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction.

Section 9.05         Entire Agreement. This Agreement and the documents to be delivered hereunder constitute the sole and entire agreement of the parties to this Agreement with respect to the subject matter contained herein, and supersede all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter. In the event of any inconsistency between the statements in the body of this Agreement and the documents to be delivered hereunder, the Exhibits and Disclosure Schedules (other than an exception expressly set forth as such in the Disclosure Schedules), the statements in the body of this Agreement will control.

Section 9.06         Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. Neither party may assign its rights or obligations hereunder without the prior written consent of the other party, which consent shall not be unreasonably withheld or delayed. No assignment shall relieve the assigning party of any of its obligations hereunder.

 

Section 9.07         No Third-party Beneficiaries. Except as provided in Article VI, this Agreement is for the sole benefit of the parties hereto and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other person or entity any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.

Section 9.08         Amendment and Modification. This Agreement may only be amended, modified or supplemented by an agreement in writing signed by each party hereto.

Section 9.09         Waiver. No waiver by any party of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving. No waiver by any party shall operate or be construed as a waiver in respect of any failure, breach or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any right, remedy, power or privilege arising from this Agreement shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

Section 9.10         Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Alabama without giving effect to any choice or conflict of law provision or rule (whether of the State of Alabama or any other jurisdiction).

Section 9.11         Submission to Jurisdiction. Any legal suit, action or proceeding arising out of or based upon this Agreement or the transactions contemplated hereby may be instituted in the federal courts of the United States of America or the courts of the State of Delaware or State of Alabama in each case located in the city of Wilmington and county of New Castle County, or city of Cullman and county of Cullman County, and each party irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action or proceeding.

Section 9.12         Waiver of Jury Trial. Each party acknowledges and agrees that any controversy which may arise under this Agreement is likely to involve complicated and difficult issues and, therefore, each such party irrevocably and unconditionally waives any right it may have to a trial by jury in respect of any legal action arising out of or relating to this Agreement or the transactions contemplated hereby.

 

Section 9.13         Specific Performance. The parties agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof and that the parties shall be entitled to specific performance of the terms hereof, in addition to any other remedy to which they are entitled at law or in equity.

Section 9.14         Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

[SIGNATURE PAGE FOLLOWS]

 

$

6,500,000.00

January 18, 2018

Date		Principal Payment Amount
January 2, 2020		$	1,000,000
January 2, 2021		$	1,000,000
January 2, 2022		$	1,000,000

	“MAKER”:
	STANDARD OUTDOOR SOUTHEAST I LLC
	By:
	Name:		Ian W. Estus
	Title:		President

By:
Name:
Title:

	ASSIGNEE:
	STANDARD OUTDOOR SOUTHEAST I LLC
	By:
	Name:	Ian W. Estus
	Title:	President

	ASSIGNOR:
	QUALITY I/N SIGNS AND OUTDOOR ADVERTISING, LLC
	By:
	Name:
	Title:
	ASSIGNEE:
	STANDARD OUTDOOR SOUTHEAST I LLC
	By:
	Name:	Ian W. Estus
	Title:	President